Less than half of workers have calculated how much they need to save for retirement: EBRI
Retirement looms large among the concerns of Affluent investors, according to ongoing Millionaire Corner research. Not saving enough for retirement is their biggest regret, while running out of money in retirement is their biggest financial fear.
A new Employee Benefit Research Institute (EBRI) Retirement Confidence Survey released Tuesday suggests these concerns may be justified. More than one-fourth (28 percent) of workers are not at all confident that they have saved enough money for a comfortable retirement. This is an increase from 23 percent in 2012, and the highest level in the 23 years that EBRI has tracked retirement savings.
The percentage of workers who are secure about their retirement future is unchanged from 2011, with only 13 percent saying that they are very confident and 38 percent saying they are somewhat confident.
One reason that retirement confidence remains comparatively low despite recent gains in the economy, EBRI suggests, is that it is dawning on some workers how much more money they need to safe toward a secure financial future. Asked how much they believe they will need to save for their retirement, a significant number cited large savings targets: 20 percent said they need to save between 20 and 29 percent of their income, and 23 percent indicate they need to save at least 30 percent.
Not that many have actually sat down to analyze their financial situations. Less than half (46 percent) of respondents said that they and/or their spouse have tried to calculate how much money they will need to have saved by the time they retire to maintain their standard of living.
An apparent misunderstanding or underestimation of financial realities of retirement is complicating retirement planning. Read about it here
"The good news is that people really do understand how much they should be saving," says Jack VanDerhei, EBRI research director and co-author of the report, said in a statement. "But the bad news is that this has not yet translated into action."
Americans are more focused on their immediate financial concerns, and not on retirement, the survey found. Cost of living and day-to-day expenses head the list of reasons why workers do not contribute (or contribute more) to their employer’s retirement plan, with 41 percent of eligible workers citing this factor.
What are their immediate concerns? Thirty percent of respondents said they are most concerned about job uncertainty, while 55 percent (along with 39 percent of retirees) are dealing with debt problems that do not leave much more left over for savings. Nearly one-third of workers, 28 percent said that they have less than $1,000 in savings or investments and 12 percent said that making ends meet is their most immediate concern.
Only 2 percent of workers and 5 percent of retirees said that retirement is their most pressing issue.
What else is standing in the way of saving for retirement? Read about it here.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.